LAW FOR ALL

Company Laws = Whether the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter for short “SICA”) are applicable to the “foreign companies” registered in India under the provisions of Section 591 of the Companies Act, 1956 (hereinafter for short “the Act”) and, therefore, the revival scheme framed by the Board for Industrial and Financial Reconstruction (hereinafter referred to as “BIFR”) in respect of the Baranagore Jute Factory Plc. (hereinafter for short ‘the Respondent Company’) is required to be implemented. Section 3(o) of the Act which defines a sick industrial company in the following terms: “(o) “sick industrial company” means an industrial company (being a company registered for not less than five years) which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth. Explanation.—For the removal of doubts, it is hereby declared that an industrial company existing immediately before the commencement of the Sick Industrial Companies (Special Provisions) Amendment Act, 1993 registered for not less than five years and having at the end of any financial year accumulated losses equal to or exceeding its entire net worth, shall be deemed to be a sick industrial company;”= In the aforesaid situation keeping in view the object and scheme of the Act and the virtual consensus of the contesting parties with regard to the present financial health of the respondent company it is clear that the company can no longer fall within the ambit of the expression “sick industrial company” as defined in Section 3(o) of the Act. Further applicability of SICA to the respondent company, therefore, does not arise.